B-R 31 ICE CREAM CO.,LTD.

Business Details

The Group is a single-segment company engaged in the manufacture and sale of ice cream products and franchise-based store operations. Products are manufactured at its own factories (Fuji Oyama and Kobe Miki), with revenue derived from wholesale sales to franchisees, royalty income, and rental of store equipment. Consolidated subsidiary 31 Aikalima LLC operates directly managed stores in Hawaii. With a total of 1,561 sales locations domestically and overseas, spanning from Hokkaido to Okinawa, the company operates Japan's largest ice cream specialty store chain.

Recent Overview

In Q1 FY2026, net sales and net profit reached record highs, but operating profit declined 4.2% YoY due to higher SG&A expenses

Net sales for Q1 FY2026 (January–March) reached a record high of ¥7,471 million (up 13.5% YoY). Domestic total retail sales also reached a record ¥14,484 million, with retail sales per store of ¥13 million, also a record high. On the other hand, cost of sales increased 20.0% YoY (¥3,870 million), outpacing sales growth, and SG&A expenses rose by ¥259 million YoY to ¥3,198 million due to increased advertising, higher logistics costs, and expenses related to network expansion. As a result, operating profit came to ¥403 million (down 4.2% YoY), though this exceeded the Q1 target implied by the full-year forecast. Ordinary profit increased 12.3% YoY to ¥425 million, partly due to the recording of ¥28 million in foreign exchange gains, and net profit increased 12.4% YoY to ¥272 million. The full-year forecast (net sales of ¥35,830 million, operating profit of ¥2,830 million) remains unchanged.

Key Products

Growth Drivers

• Strengthening brand power through collaboration products with popular characters such as Sanrio Characters and the new "31 Patisserie" category
• Strengthening digital marketing and promoting greater use of mobile ordering through the 31Club membership app, which has over 11 million members (with a member purchase ratio of 44.1%)
• Expanding sales opportunities through 1,078 domestic stores (a net increase of 40 stores from the prior year-end) and 1,561 total sales locations (an increase of 88)
• Strengthening supply capacity for ice cream cakes and other products through investment in expanded production capacity at the Fuji Oyama factory (construction in progress of ¥1,160 million)
• Containing increases in cost of sales through supply chain optimization and more efficient manufacturing management and faster production speeds at factories
• Simplifying store operations and improving productivity through the use of digital technologies, including the introduction of digital signage

Risks

• Upward pressure on manufacturing costs due to rising raw material prices and yen depreciation (in Q1 FY2026, cost of sales increased 20.0% YoY, far outpacing the 13.5% increase in net sales, causing the operating margin to decline from 6.4% to 5.4%)
• Supply chain disruption from frequent geopolitical risks, and uncertainty over the supply of imported resources and foreign exchange trends
• An uncertain economic outlook in which, despite a turn to positive real wage growth, economic anxiety continues to exceed expectations, raising concerns about adverse effects on consumer sentiment
• Rising delivery costs due to labor and driver shortages in the logistics industry and tightening CO2 regulations (increases in logistics costs and other selling expenses have become apparent alongside sales growth)
• Risk of deteriorating market conditions at directly managed stores in Hawaii and Taiwan (52 overseas stores) and the impact of foreign exchange fluctuations on results (foreign currency translation adjustments worsened from ¥304 million to ¥249 million from the prior year-end)
• Impact on revenue recognition from changes in estimates of the non-exercise ratio of ice cream gift certificates (contract liability balance of ¥2,583 million)